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Shipping corpn. Of india Versus Monica India And Ors.

2015 (3) TMI 1300 - DELHI HIGH COURT

Suit for recovery for alleged detention charges upto to the date of the filing of the suit - Held that:- In the present case, despite lapse of considerable time, defendants No.1 to 5 were neither lifting the goods nor paying the detention charges. This conduct of defendants No.1 to 5 was a clear pointer to the plaintiff that the defendants No.1 to 5 had more or less abandoned the goods. There can be no reason or explanation as to why the plaintiffs have continued to keep waiting and did not take .....

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of ₹ 50 lacs made by one of the Customs Department official for release of the goods. DW-1 in his evidence by way of affidavit has clearly pointed out the name of the official namely Mahesh Kumar Badha. It is stated that the said official has been chargesheeted for his conduct relating to the goods of Sanjeev Woolen Mills. His chargesheet has been filed alongwith affidavit though it has not been proved and has been given a mark as D-7. The said document has not been contested by the plaint .....

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wever, defendants No.1 to 4 have filed no counter claim. In view of the judgment of the Division Bench of this High Court in the case of CWP 17976-77/2004, no liability can be thrust on defendant No.6. Defendant No.5 is not appearing and has been proceeded ex parte. The admitted position is that when the transaction took place in 1991 he was a partner of defendant No.1. He has exited sometime in 1993. If there is no liability of defendants No.1 to 4 no liability can also fall on defendant No.5. .....

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us to prove this issue was on defendants No.1 to 4. In the written submissions filed no submissions have been made to support this contention. In the present suit the plaintiffs claimed detention charges of only three years prior to filing of the suit. Hence, I hold that the suit is not barred by time. In view of my finding on issue no. 1 above, the present suit is dismissed with costs. The goods are still lying in a container with the plaintiff. The plaintiffs are free to take steps to destuff .....

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ant Nath, 1. The plaintiff has filed the present suit for recovery of ₹ 83,29,000-/ for alleged detention charges upto to the date of the filing of the suit. A decree is prayed for against defendants No. 1 to 5 to pay jointly and severally the said amount. Regarding defendant No.6, it is prayed that the suit be decreed against the said defendant for such amount as this court may think fit of the amount claimed. 2. As per the plaint the plaintiff is a Government owned shipping company. It i .....

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f 20 feet. The consignment arrived on 21/25.2.1991 and bill of entry was filed on 23.2.1991. (ii) Consignment from Taiwan under Bill of Lading No. ICDKEBM- 4(A) dated 31.12.1990 in six containers, each of 20 feet in the vessel Jalgodavari. The consignment arrived on 10.3.1991 and Bill of Entry was filed on 19.4.1991. (iii) Consignment from Taiwan under Bill of Lading No.ICDKEBM- 9(A) dated 05.02.1991 in six containers, each of 20 feet. The consignment arrived on 1.4.1991 and Bill of Entry was fi .....

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ls As per IPBC Tarrif of 91 As per Amended IPBC Tarrif of 95 For the 1st 7 days (after expiry of 5 free days) USD 7 per day USD 8.50 per day For the next 7 days USD 12 per day USD 13.50 per day For the next 7 days USD 16 per day USD 17.50 per day For all days thereafter USD 20 per day USD 48.00 per day For a 40 ft container: Double the charges as that for that 20 ft container. 5. The claim of the plaintiff is restricted to the consignments as contained in the Bill of Lading dated 28.12.1990 and .....

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nt, namely, defendant No. 6. The said consignments were detained by defendant No. 6. A show cause notice was issued by defendant No. 6 on 29.8.1991. 7. Thereafter a legal battle started between defendants No.1 to 5 and defendant No.6. Defendants No. 1 to 5 filed a writ petition before this High Court being CWP No.3277/1992 in September 1992 against defendant No.6 the Customs Department. This petition was disposed of on 23.04.1993. The court directed that fresh samples of the goods be taken withi .....

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he meantime the detention charges continued to mount. On a special request of defendants No. 1 to 5, substantial concessions in detention charges were made. Defendant No. 1 was requested to pay the concessional detention charges and get the delivery order re-validated but to no avail. 8. In June 1995, defendants No. 1 to 5 again approached the plaintiff with a fresh detention certificate but they again wanted delivery of the goods without paying detention charges. These requests were hence turne .....

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ase of the consignment by waiving demurrage charges. As it was claimed that the fault was of the Customs Department, Defendant No. 1 was permitted to file a fresh petition stating the claim against the Custom Department. 10. In the meantime, another firm by the name Sanjeev Woollen Mills of which defendants No. 2 to 5 are also partners got embroiled in a litigation with defendant No. 6, for a similar consignment. Defendant No. 6 in a writ petition filed by the said Sanjeev Woollen Mills being CW .....

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being CW No.3916/1995. In this writ petition it was prayed that the Customs Authorities be directed to make the payment of detention charges to the plaintiff. This writ petition was however withdrawn on 19.03.1997 with liberty to approach the court again if the need arises. 11. It is averred that having not succeeded in the writ petitions to get any relief against the plaintiff, defendants No. 1 to 5 on 23.04.1998 acknowledged the factum of payment of detention charges and offered to pay ₹ .....

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rgess for the consignments in respect of three years immediately preceding to the filing of the suit. 12. The defendant nos. 1 to 4 filed a separate written statement. They have pleaded that the suit is barred by limitation as the Customs Department/defendant no. 6 had issued detention certificates on 29th May, 1993 and 8th June, 1993. It is averred that the said defendants approached the plaintiff for release of goods and also wrote a letter dated 30th June, 1993 with the same request. It is ur .....

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akin to the facts of Sanjeev Woollen Mills (supra) and hence, defendant no. 6/Customs Department would be liable for detention and demurrage charges, if any as directed in that case by the High Court and upheld by the Supreme Court. 14. It is stated that several such consignments were imported earlier and were got released without detention or demurrage charges. It is further stated that the goods were detained by defendant no. 6/Customs Department due to mala fide reasons to harass the defendan .....

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Court in the case of International Airports Authority of India and Ors. vs. Grand Slam International and Ors., (supra). It is averred that the Customs Department is not concerned with the demurrage charges or detention charges. The goods were not cleared as there was a dispute on the quality and value of goods involving huge government revenues and the action of the Customs Department was bona fide. 16. At the time of import of the consignments defendant no.5 was a partner of defendant No.1. Som .....

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the plaintiff and defendants no. 1 to 4? OPD-1 to 4 5. Relief. 18. It may also be noted that on the same date i.e. 26th July, 2010, the defendant no. 6/Customs Department was proceeded ex parte. Defendant No.6 has not appeared thereafter. 19. The plaintiff has led the evidence of Captain Yogesh Puri, PW-1. He has exhibited in all eight documents. The defendant nos. 1 to 4 have led the evidence of Mr. Satprakash Goyal, DW-1 (defendant No.2). He has attached with his evidence nine documents which .....

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f documents. Admission/denial was completed in 2006. Thereafter, the parties have again started taking adjournments on the ground that the contentions raised in the present suit would stand concluded in a pending adjudication of a writ petition filed by defendant nos. 1 to 4. 21. Issues were finally framed on 26th July, 2010. Several dates were taken by the parties for completing evidence. When the Hon‟ble Supreme Court passed order dated 26th November, 2014 for disposal of the suit within .....

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ation of DW-1 took place on 4th February, 2015 and 5th February, 2015. The matter was placed before the Court for hearing on 11th February, 2015. 22. The limited arguments advanced by the counsel for the plaintiff and defendant nos. 1 to 4 were heard on 19th February, 2015 and on 24th February, 2015. Parties filed their written submissions. The judgment was reserved on 24.02.2015. 23. At this stage, I may refer to another aspect. A question was posed to learned counsel for the parties as to what .....

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d SLP arose out of a judgment and order dated 22.2.2012 passed in W.P.(C)17976-17977/2004. I requested the Registry to send the file of WP(C) No.17976-17977/2004. A perusal of the writ petition shows that it was filed by defendant No.1 seeking directions to Shipping Corporation of India Limited and Container Corporation of India Limited to deliver the goods in question pursuant to the three bills of entry without payment of any detention or demurrage charges. The matter was disposed of by the Di .....

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rties have made very limited submissions on merits in the course of final arguments. Essentially they have relied upon their written submissions. 25. I will first deal with issue No.1 which reads as under:- (i)Whether the plaintiff is entitled to recover ₹ 83,29,000/- from defendant s No.1 to 5? If so, at what rate of interest? OPP 26. In the written submissions filed the plaintiff has reiterated the contentions of the plaint. It is reiterated that defendants No.1 to 5 are liable to pay th .....

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d other charges and were required to obtain delivery order and take delivery of consignment from the containers within five working days on arrival of the containers. As the same was not done it is urged that the said defendants became liable to pay detention charges for the containers as per IPBC Tariff 1991 as amended in 1995. It is stated that disputes arose between defendants No.1 to 5 and the Customs Department/defendant No.6. Defendant No.6 finally issued the Detention Certificate on 8.6.1 .....

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urt in Shipping Corporation of India vs. C.L.Jain Woolen Mills & Ors., (2001) 5 SCC 345 and International Airports Authority of India & Ors vs. Grand Slam International & Ors., (supra). 27. The defendants No.1 to 4 have in their written submissions pointed out that the value of goods is around ₹ 14 lacs only. Out of this, 30% of the goods have been damaged due to natural calamities and 30% of the cargo has been stolen on account of which defendants No.1 to 5 have lodged an FIR. .....

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njeev Woolen Mills which had also imported goods of identical description contemporaneously and at the same time as the goods were imported by the defendants No.1 to 5 herein. In that case of Sanjeev Woolen Mills the Division Bench of this Court had held that there are serious allegations of malafide on the part of the Customs Department and on account of the same the Division Bench directed that the demurrage charges would be borne by the Customs Department. This judgment was upheld by the Supr .....

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5.2.1993 the defendant No.6 had in the said proceedings before this High Court stated that an appeal titled Union of India & Ors. vs. Sanjeev Woolen Mills (supra) is pending before CEGAT whose decision is awaited by the respondent No.6 so as to apply the same to the case of the petitioner therein (i.e. defendants No.1 to 5 herein). A direction was passed by this Court to CEGAT to decide the appeal with expedition and not later than three months. Relying on this submission of defendant No.6 b .....

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len Mills and the same officer was responsible for delaying the release of the goods of the defendant herein. 31. Reliance is also placed on judgments of this High Court in the case of Om Petro Chemicals vs. Union of India and Ors. 2002(140) ELT 353(Del.) and Sonia Overseas (P) Ltd. vs. Asst.Commr.,Customs, 2009(244) ELT30(Del.) to contend that the liability if any is of defendant No.6. 32. The facts which are sought to be relied upon by the plaintiff are not really disputed by defendants No.1 t .....

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years. There is no dispute about the applicability of the IPBC Tariff. Defendants No.1 to 4 never paid the detention charges and kept contending that it is at best the liability of defendant No.6. The plaintiff kept asking for its dues, but never took any other step. 33. I may clarify here that a perusal of the plaint shows that the only issue here is recovery of detention charges. There are no submissions made regarding any demurrage or storage charges payable. In fact a question was posed to .....

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n the said case of Sanjeev Woolen Mills (supra). The products were imported contemporaneously. The same officer was responsible for holding up the goods illegally and malafidely in the case of defendants No. 1 to 5 and in the case of Sanjeev Woolen Mills. The Division Bench of this Court directed the Customs Authority in case of Sanjeev Woolen Mills (supra) to bear the demurrage charges which direction was upheld by the Supreme Court in Union of India & Ors. vs. Sanjeev Woolen Mills (supra). .....

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on- In estimating the loss or damage arising from a breach of contract, the means which existed of remedying the inconvenience caused by the non-performance of the contract must be taken into account. 36. The goods arrived on 21 to 25.2.1991 and 10.3.1991. The customs department issued the detention certificate on 8.6.1993 and 29.5.1993. From 8.6.1993 till the year 2000 when the present suit was filed the defendants kept asking for reduction of detention charges or that the payment be collected .....

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e defendants, when they filed the written statement they stated that 30% of the goods have been damaged due to natural calamities and 30% of the cargo has been stolen for which an FIR has been got registered. It is unlikely that the cargo would be of much worth today. 38. What is the effect of the conduct of the plaintiff? The value of the goods was around 14 lacs when they were imported. According to the plaintiff total dues which have accrued upto 10.03.2000 as per the IPBC tariff is ₹ 1 .....

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vs. Darshan Lal Jain in RFA 374/2001 decided on 29.09.2008. The facts of that case were that the appellant had placed an order on the respondent for manufacture and supply of certain type of tin boxes. There was a default in lifting some of the tin boxes ordered on account of certain disputes. The following observations were made in the context of the award of damages for storage of the goods in the godown for a certain period after the order had been cancelled by the appellants. 40. This Court .....

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could not store other goods in the godown due to lack of space, we hold that no case is made out to award damages towards storage charges. 41. In the present case, despite lapse of considerable time, defendants No.1 to 5 were neither lifting the goods nor paying the detention charges. This conduct of defendants No.1 to 5 was a clear pointer to the plaintiff that the defendants No.1 to 5 had more or less abandoned the goods. There can be no reason or explanation as to why the plaintiffs have con .....

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custody on behalf of the Merchant and at the Merchant‟s risk and expense or to charge demurrage in accordance with the carrier‟s tariff applicable to the route over which the Goods are carried. If unpacking the contents of Container is required for whatever reason and the contents cannot be identified as to remarks and numbers, cargo sweepings, liquid residue and any unclaimed contents not otherwise accounted for shall be allocated for completing delivery to the Merchant. The Carrie .....

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e container and free the container. 44. The above facts have to be seen in the light of the rights of the plaintiff. Sections 170 and 171 of the Indian Contract Act, 1872 reads as follows:- 170. Bailee s particular lien - Where the bailee has, in accordance with the purpose of the bailment, rendered any service involving the exercise of labour or skill in respect of the goods bailed he has in the absence of a contract to the contrary, a right to retain such goods until he receives due remunerati .....

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here is no serious dispute between the parties that the plaintiff would have a lien on the goods for recovery of the detention charges. However, a lien does not give right to the bailee to sell the goods. In this regard reference may be had to the judgment of the Supreme Court in the case of The Board of Trustees of the Port of Bombay and Ors. vs. M/s.Sriyanesh Knitters, AIR 1999 SC 2947/MANU/SC/0431/1999 where in paragraph 18 the Supreme Court held as follows:- 18. There is another aspect which .....

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Before selling the goods no order of any court or other judicial authority is required. On the other hand the general lien contemplated by Section 171 of the Contract Act only enables the retention of the bailed goods as a security. Their retention does not give any power to sell the goods, unlike the power contained in Section 61 of the MPT Act. If payment is not made by the consignee to the wharfinger, in a case where Section 171 of the Contract Act applies, the wharfinger can only retain the .....

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pect of current dues cannot be regarded as whittling down the right of general lien contained in Section 171 of Contract Act in respect of old dues. 45. Hence, the right of lien provided under sections 170 and 171 of the Contract Act enables the plaintiff to detain goods as security. He has, however, no right to sell the goods and realise its dues. He has to file a suit for recovery of the amount due and take orders from the Court for sale of goods. 46. The facts show that after 1993 when the De .....

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, the time was not the essence of the contract, the appellant-plaintiff was required to approach the court of law within a reasonable time. A constitution Bench of this Hon'ble Court in Chand Rani (Smt.) (Dead) By Lrs. v. Kamal Rani (Smt.) (Dead) By Lrs. AIR1993SC1742 held that in case of sale of immovable property there is no presumption as to time being the essence of the contract. Even if it is not of the essence of contract, the court may infer that it is to be performed in a reasonable .....

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rt of the contract within a reasonable time and reasonable time should be determined by looking at all the surrounding circumstances including the express terms of the contract and the nature of the property." 14. The word "reasonable" has in law prima facie meaning of reasonable in regard to those circumstances of which the person concerned is called upon to act reasonably knows or ought to know as to what was reasonable. It may be unreasonable to give an exact definition of the .....

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at all the circumstances of the case; a reasonable time under ordinary circumstances; as soon as circumstances will permit; so much time as is necessary under the circumstances, conveniently to do what the contract requires should be done; some more protracted space than 'directly'; such length of time as may fairly, and properly, and reasonably be allowed or required, having regard to the nature of the act or duty and to the attending circumstances; all these convey more or less the sam .....

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cumstances of each case. 49. Hence, the plaintiff was obliged to take steps within a reasonable time to realise its dues press for necessary orders and to thereafter dispose of the goods of defendants No.1 to 5. This step by the plaintiff would lead to twin results. Firstly, the deterioration of the goods/loss of goods due to passage of time would be prevented. Secondly, orders of the Court could be requested for disposal of the goods so as to ensure that the detention charges stop running. The .....

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several letters to the plaintiff including letters dated 29.4.1991, 29.5.1993, 14.4.1997, 14.7.1997 etc. asking for remission of the detention charges and release of the goods. These communications have not been proved in evidence. However, it is clear that from 1993 till filing of the suit, the defendants 1 to 4 were not interested to pay the detention charges. The lapse of time itself would have been an indication of this stand of defendants 1 to 4. Delay beyond reasonable time which is abnor .....

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best 1995. There is no explanation for an abnormal delay of about five years to approach the court. The claim for detention charges for the period March 1997 to March 2000, as is sought in the plaint is not sustainable and cannot be claimed. 51. Coming to the second leg of the submission of defendants No.1 to 4, parities with the case of Sanjeev Woolen Mills, we may have a look at the facts of the case of Sanjeev Woolen Mills. That was a case where four bills of entry were of January 1991 to Mar .....

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ugh this document has not been proved, it is not a disputed document and I can refer it for culling out the facts of the present case regarding the dispute with defendant No.6. As per the Show Cause Notice the bills of entry in the present case were for clearance of goods for synthetic waste/soft quality. As per the test report, it is stated that in the Show Cause that the sample tested found that there is no existence/percentage of waste as defined earlier. The bills of entry are also of Februa .....

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ase, the High Court has passed the impugned orders directing the appellants to issue a detention certificate and bear the demurrage and container detention charges . They are obviously orders passed in the special circumstances of the present case, and particularly the conduct of the Customs authority in not releasing the goods even after the order of unconditional release dated 11.8.1995 passed by their own Chief Commissioner. The conduct of the Customs officers concerned is also under investig .....

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iod prior to 5.4.1997, however, the order of the High Court does not require any intervention from us. The appellants shall file a progress report relating to the departmental inquiry by 30th November, 1998. 53. I may also look at the judgment relied upon by the plaintiff in the case of Shipping Corporation of India Ltd. vs. C.L.Jain Woollen Mills & Ors. (supra). The facts of the case were that on 18.01.1999 the Division Bench of this High Court called upon the Customs Department and the two .....

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Supreme Court in paragraph 8 held as follows:- 8. ..... In the contextual facts, notwithstanding the judgment of the High Court, the goods not having been released, the impugned order and direction dated 18.1.99, cannot be held to be infirm in any manner. In the absence of any provision in the Customs Act, entitling the customs officer to prohibit the owner of the space, where the imported goods have been stored from levying the demurrage charges, levy of demurrage charges for non-release of th .....

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Customs Act cannot be construed to have clothed the customs authorities with the necessary powers, so as to absolve them of the liability of paying the demurrage charges. In the aforesaid premises, we see no infirmity with the directions given by the Delhi High Court on 18.1.99. The goods in question, having already been directed to be released, without the payment of the demurrage charges, the importer must have got the goods released. Having regard to the fact situation of the present case, it .....

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the judgments of the Supreme Court in Union of India & Ors. vs. Sanjeev Woolen Mills (supra) and Shipping Corporation of India vs. C.L.Jain Woolen Mills & Ors.(supra) held as follows:- 23. Would that however mean that the petitioner must pay demurrage charges even though it is not at fault. Answer to the question must be rendered in negative. The decisions of the Apex Court Therefore are authorities for the proposition in certain situation, the court may direct the customs authorities t .....

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in importing the goods in question, in our opinion, it cannot ordinarily be saddled with the liability of payment of demurrage. The petitioner in the fact situation of this case must be held to have been sinned against than sinning. In UOI v. Sanjeev Woollen Mills, 1998(100)ELT323(SC) , the Apex Court in the fact situation obtaining therein held that demurrage may not be paid by the importer. 56. Similarly, in Sonia Overseas (P) Ltd. vs. Asst.Commr.,Customs (supra) a Division Bench of this High .....

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e customs cannot be established. 57. The question is: Are the malafides established in the present case? In Union of India & Ors. vs. Sanjeev Woolen Mills (supra) the Supreme Court had noted that the conduct of the Customs Officers concerned is under investigation. In fact the customs was directed to file a progress report regarding a departmental enquiry in the said case. 58. In the present case also in the written statement itself defendants No.1 to 4 have stated that the goods of the defe .....

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he said document has not been contested by the plaintiffs. It is an article of charge framed against Mahesh Kumar Badha the then Collector of Customs who was operating as Collector of Customs from January 1991 to January 1992. The allegation pertains to his conduct regarding Sanjeev Woolen Mills, namely, not allowing clearance of waste/woollen waste imported by the firm. 59. DW-1 Sh.Sat Prakash Goyal, Defendant No.2 in his affidavit by way of evidence on bribery has stated as follows:- 22. CBI e .....

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o detained by the defendant no.6. It is relevant to mention here that show cause notice were issued after lapse of more than an year and there was no delay on part of the defendant no.1 to 5. In the meanwhile defendant no.1 firm made several representation for release of goods but no heed was paid to the said representation and even to representation to the ministry of Finance. ………. 24. That the goods detained of M/s Monica India were never released by the custom department. .....

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by Custom Officers and in exceptional cases, where he was getting heavy illegal money, in favour of importer. The undersigned, defendant no.2, have filed criminal complaint dt. 20-09-2014 filed on 29-09-2014 in Ludhiana District Courts against the CRCL and custom officers, copy annexed marked Exhibit-D8. May this Hon‟ble court be pleased to direct the lower court to expedite and decide the same within 3 months as it is based on all documentary evidences taken under RTI Act, 2005 to curb ma .....

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incorrect to suggest that the goods were detained prior 30.06.1993 on account of fault of the defendant. Sh.M K Bhada was the person concern, the then Collector of Custom ICD, New Delhi who had demanded the bribery from the defendant. Q. Would you be able to say as to whether there is any difference in between the facts of Sanjeev Woolen Mills Case and the present case? A.No. 62. In the light of the above categorical averments, and the evidence of DW-1 it is clear that defendants No. 1 to 4 hav .....

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ants No.1 to 4 no liability can also fall on defendant No.5. 64. I have already held that the plaintiffs are not entitled to claim detention charges on account of clause 18 of the Bill of Lading and the explanation to section 73 of the Contract Act for the period claimed in the suit i.e. March 1997 to March 2000. The issue No.1 is answered accordingly. 65. I will now deal with issue no 2 which reads as follows:- 2. Whether the present suit is barred by Section 155 of the Customs Act?OPP 66. Sect .....

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hority for anything purporting to be done in pursuance of this Act without giving the Central Government or such officer a month‟s previous notice in writing of the intended proceeding and of the cause thereof, or after the expiration of three months from the accrual of such cause. 67. Hence, no suit etc. lies for any act done by the Central Government in good faith. Similarly, no suit can be commenced for anything done in good faith without giving the Central Government a month‟s pr .....

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that the goods were illegally detained for mala fide. If some liability was to be thrust on defendant No.6 on account of the said mala fide act, it could not be said that the suit is barred under Section 155 of the Customs Act. 70. The Division Bench of this Court in Sonia Overseas (P) Ltd. vs. Asst.Commr. Customs, (supra) held as follows:- 7. As regards the immunity granted by the statute, it will be noted that Section 155 of the Customs Act seeks to protect the actions of the local authority f .....

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ral shades of meaning. In the popular sense, the phrase in good faith simply means honestly, without fraud, collusion, or deceit; really, actually, without pretence and without intent to assist or act in furtherance of a fraudulent or otherwise unlawful scheme , (see Words and Phrases, Permanent Edn., Vol. 18-A, p. 91). Although the meaning of good faith may vary in the context of different statutes, subjects and situations, honest intent free from taint of fraud or fraudulent design, is a const .....

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Whether an act has been done in good faith would depend upon the factual scenario. In order to establish good faith , it has to be established that what has been imputed concerning the person claiming it to be so, is true. 10. Good faith according to the definition in Section 3(22) of the General Clauses Act, 1897 means a thing, which is in fact done honestly whether it is done negligently or not. 11. Anything done with due care and attention, which is not mala fide is presumed to have been done .....

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